December 31
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(Dollars in Thousands) 1998 1997
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Assets
Loans:
Commercial $22,243,114 $18,218,837
Real estate -- commercial 6,251,879 6,410,531
Real estate -- residential 9,664,115 9,987,066
Consumer 14,822,759 12,357,229
Credit card 1,852,635 2,047,769
Home equity 3,176,664 2,972,987
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Total loans 58,011,166 51,994,419
Allowance for loan losses (970,243) (941,874)
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Net loans 57,040,923 51,052,545
Mortgage loans held for sale 3,507,487 1,249,708
Securities available for sale, at market 16,119,370 13,797,566
Federal funds sold and security resale agreements 930,492 542,156
Other short-term investments 218,149 84,204
Cash and demand balances due from banks 4,783,491 4,319,309
Properties and equipment 1,150,210 1,031,912
Accrued income and other assets 4,495,510 3,701,681
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Total Assets $88,245,632 $75,779,081
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Liabilities and Stockholders' Equity
Liabilities:
Demand deposits (noninterest bearing) $10,911,926 $10,287,007
NOW and money market accounts 18,610,832 16,106,637
Savings accounts 4,021,113 4,222,729
Time deposits of individuals 17,450,904 18,631,280
Other time deposits 2,280,973 1,633,282
Deposits in overseas offices 4,971,161 1,736,419
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Total deposits 58,246,909 52,617,354
Federal funds borrowed and security repurchase
agreements 9,427,309 4,810,953
Borrowed funds 2,117,916 4,264,556
Long-term debt 9,009,448 5,647,302
Corporation obligated mandatorily redeemable capital
securities of subsidiary trusts holding solely
debentures of the Corporation 679,894 649,892
Accrued expenses and other liabilities 1,751,248 1,630,764
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Total Liabilities 81,232,724 69,620,821
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Stockholders' Equity:
Preferred Stock, stated value $50 per share,
authorized 5,000,000 shares, outstanding 721,954
shares in 1998 36,098 --
Common stock, par value $4 per share, authorized
700,000,000 shares,
outstanding 326,327,360 shares in 1998 and
315,697,488 shares in 1997 1,305,309 1,262,790
Capital surplus 1,968,751 1,108,920
Retained earnings 3,430,672 3,440,763
Accumulated other comprehensive income 272,078 345,787
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Total Stockholders' Equity 7,012,908 6,158,260
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Total Liabilities and Stockholders' Equity $88,245,632 $75,779,081
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See notes to consolidated financial statements.
For the Calendar Year
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(Dollars in Thousands Except Per Share Amounts) 1998 1997 1996
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Interest Income
Loans $4,811,735 $4,486,529 $4,425,124
Securities:
Taxable 836,430 795,229 813,653
Exempt from Federal income taxes 48,831 45,043 40,548
Federal funds sold and security resale agreements 43,793 20,225 23,498
Other short-term investments 15,888 15,486 16,066
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Total interest income 5,756,677 5,362,512 5,318,889
Interest Expense
Deposits 1,846,276 1,813,251 1,862,084
Federal funds borrowed and security repurchase
agreements 353,882 235,882 248,512
Borrowed funds 168,507 180,082 130,811
Long-term debt 476,364 322,959 232,418
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Total interest expense 2,845,029 2,552,174 2,473,825
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Net Interest Income 2,911,648 2,810,338 2,845,064
Provision for Loan Losses 201,400 225,367 239,936
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Net interest income after provision for loan losses 2,710,248 2,584,971 2,605,128
Noninterest Income
Item processing revenue 484,503 393,115 364,512
Service charges on deposit accounts 384,938 359,268 323,636
Trust and investment management fees 311,050 278,793 255,598
Card-related fees 201,168 205,631 191,272
Mortgage banking revenue 327,247 158,544 109,670
Brokerage revenue 90,477 75,374 65,053
Other 380,300 295,668 218,746
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Total fees and other income 2,179,683 1,766,393 1,528,487
Securities gains 134,459 81,239 108,650
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Total noninterest income 2,314,142 1,847,632 1,637,137
Noninterest Expense
Salaries, benefits and other personnel 1,594,757 1,449,445 1,379,790
Equipment 212,871 204,862 193,601
Net occupancy 202,664 193,555 197,014
Assessments and taxes 52,502 57,269 82,953
Merger and restructuring 379,376 65,902 74,745
Other 934,943 821,537 872,375
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Total noninterest expense 3,377,113 2,792,570 2,800,478
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Income before income taxes 1,647,277 1,640,033 1,441,787
Income tax expense 576,596 517,839 448,271
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Net Income $1,070,681 $1,122,194 $ 993,516
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Net Income Applicable to Common Stock $1,068,499 $1,122,194 $ 989,488
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Net Income Per Common Share
Basic $3.28 $3.48 $3.00
Diluted 3.22 3.42 2.95
Average Common Shares Outstanding
Basic 326,005,752 322,223,892 329,548,231
Diluted 332,860,165 327,732,584 336,549,137
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See notes to consolidated financial statements.
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Unallocated
Shares Accumulated
Held by Other
Preferred Common Capital Retained ESOP Comprehensive
(Dollars in Thousands Except Per Share Amounts) Stock Stock Surplus Earnings Trust Income Total
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Balance December 31, 1995 $185,400 $1,150,046 $1,012,299 $3,324,421 $ (2,741) $222,402 $5,891,827
Comprehensive Income:
Net income 993,516 993,516
Other comprehensive income, net of tax
Unrealized gains on securities of $4,405, net
of reclassification adjustment for gains
included in net income of $70,623 (66,218) (66,218)
Total comprehensive income 927,298
Common dividends declared, National City, $1.88
per share (363,999) (363,999)
Common dividends declared of pooled company, prior
to merger (147,011) (147,011)
Preferred dividends, $2.00 per depositary share (6,458) (6,458)
Issuance of 2,868,566 common shares under
corporate stock and dividend reinvestment plans 11,474 46,345 57,819
Purchase of 4,356,000 common shares (17,424) (157,686) (175,110)
Issuance of 110,453 common shares pursuant to
acquisitions 442 3,446 3,888
Issuance of common stock by subsidiary 25,077 25,077
Conversion of 3,708,000 depositary shares of
preferred stock to 8,839,650 common shares (185,400) 35,359 150,041
--
Shares distributed by ESOP trust and tax benefit
on dividends 189 2,741 2,930
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Balance December 31, 1996 $ -- $1,179,897 $1,079,522 $3,800,658 $ -- $156,184 $6,216,261
Comprehensive Income:
Net income 1,122,194 1,122,194
Other comprehensive income, net of tax
Unrealized gains on securities of $242,408,
net of reclassification adjustment for gains
included in net income of $52,805 189,603 189,603
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Total comprehensive income 1,311,797
Common dividends declared, National City, $1.72
per share (369,370) (369,370)
Common dividends declared of pooled company, prior
to merger (116,393) (116,393)
Issuance of 3,349,463 common shares under
corporate stock and dividend reinvestment plans 13,397 66,599 79,996
Purchase of 18,075,000 common shares (72,300) (199,082) (702,363) (973,745)
Issuance of 201,120 common shares pursuant to
acquisitions 804 8,910 9,714
Stock dividend declared of pooled company, prior
to merger 140,992 152,971 (293,963) --
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Balance December 31, 1997 $ -- $1,262,790 $1,108,920 $3,440,763 $ -- $345,787 $6,158,260
Comprehensive Income:
Net income 1,070,681 1,070,681
Other comprehensive income, net of tax
Unrealized gain on securities of $13,689 net
of reclassification adjustment for gains
included in net income of $87,398 (73,709) (73,709)
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Total comprehensive income 996,972
Common dividends declared, National City, $1.88
per share (637,099) (637,099)
Preferred dividends declared (2,182) (2,182)
Issuance of 4,792,495 common shares under
corporate stock and dividend reinvestment plans 19,170 185,835 205,005
Purchase of 5,000,000 common shares (20,000) (17,041) (310,667) (347,708)
Net issuance of 10,810,084 common shares and
739,976 preferred shares pursuant to acquisition 36,999 43,240 690,245 (130,824) 639,660
Conversion of 18,022 shares of preferred stock to
27,295 common shares (901) 109 792 --
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Balance December 31, 1998 $ 36,098 $1,305,309 $1,968,751 $3,430,672 $ -- $272,078 $7,012,908
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See notes to consolidated financial statements.
For the Calendar Year
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(Dollars in Thousands) 1998 1997 1996
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Operating Activities
Net income $ 1,070,681 $ 1,122,194 $ 993,516
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses 201,400 225,367 239,936
Depreciation and amortization 220,784 152,303 139,750
Amortization of intangibles and servicing rights 65,186 74,931 85,193
Amortization of securities discount and premium 1,717 1,092 3,502
Securities gains (134,459) (81,239) (108,650)
Other gains, net (52,590) (148,273) (89,210)
Net (increase) decrease in trading account assets 7,170 151,925 (131,993)
Originations and purchases of mortgage loans held for
sale (18,596,649) (7,273,818) (3,812,069)
Proceeds from sales of mortgage loans held for sale 15,844,235 6,525,601 3,636,424
Deferred income taxes 230,093 113,781 (19,035)
(Increase) decrease in interest receivable (8,180) 79,611 (2,919)
Increase (decrease) in interest payable (78,669) 6,648 (22,972)
Net change in other assets/liabilities (586,486) (484,910) (356,125)
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Net cash provided (used) by operating activities (1,815,767) 465,213 555,348
Lending and Investing Activities
Net decrease in short-term investments (509,633) 410,820 97,640
Purchases of securities (14,877,259) (6,658,951) (5,120,760)
Proceeds from sales of securities 9,957,772 4,157,999 4,481,357
Proceeds from maturities and prepayments of securities 3,662,739 2,247,546 2,508,438
Net increase in loans (3,863,339) (1,904,919) (750,509)
Proceeds from sales of loans 192,698 136,057 400,558
Net increase in properties and equipment (210,705) (91,488) (101,512)
Acquisitions 157,632 42,207 944
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Net cash provided (used) by lending and investing activities (5,490,095) (1,660,729) 1,516,156
Deposit and Financing Activities
Net increase (decrease) in Federal funds borrowed and
security repurchase agreements 4,331,739 (345,618) (1,367,368)
Net increase (decrease) in borrowed funds (2,177,174) 1,312,406 964,054
Net increase in demand, savings, NOW, money market
accounts, and deposits in overseas offices 4,715,556 152,101 479,999
Net (decrease) in time deposits (1,636,016) (1,153,790) (1,784,390)
Repayment of long-term debt (1,770,596) (407,589) (602,376)
Proceeds from issuance of long-term debt, net 5,045,431 3,187,751 602,010
Dividends paid, net of tax benefit of ESOP shares (596,193) (477,931) (425,572)
Issuance of common stock 205,005 79,996 57,819
Repurchase of common and preferred stock (347,708) (973,745) (175,110)
Proceeds from issuance of common stock by subsidiary -- -- 114,966
ESOP trust repayment -- -- 2,741
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Net cash provided (used) by deposit and financing activities 7,770,044 1,373,581 (2,133,227)
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Net increase (decrease) in cash and demand balances due from
banks 464,182 178,065 (61,723)
Cash and demand balances due from banks, January 1 4,319,309 4,141,244 4,202,967
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Cash and demand balances due from banks, December 31 $ 4,783,491 $ 4,319,309 $ 4,141,244
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Supplemental Disclosures
Interest paid $ 2,992,709 $ 2,545,518 $ 2,496,797
Income taxes paid 242,892 337,499 512,890
Common stock issued in purchase acquisitions 639,660 9,714 3,888
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See notes to consolidated financial statements.